“a compounding pharmacy” Alisha Fewins, Zsolt Hepp, Dana Ling, Rachel Merrill University of Washington School of Pharmacy Description of Business Location Analysis • • • • Population: 30,546 44.5% of population is over the age of 65 Estimated 19% growth rate over 5 years Rural remote setting Description of Business Junior Partnership Agreement • Frick’s Drugs purchased outright by current owner of Jim’s Pharmacy for purchase price of $1 million • Junior Partnership with new owner including joint venture • Pharmacy purchased over 7 year period • Total accumulated payments to Jim’s Pharmacy: $1,687,522 Description of Business Why would Jim’s Pharmacy take this risk? • 68% return on investment • Jim’s Pharmacy expanded through joint venture • Joint venture assures financial commitment of junior partners Description of Business Joint Venture • DME Billing • Compounding • Employee & Business Insurance • Staffing Description of Business Loan Request • Loan Amount: $120,000 • Purpose: Capital for pharmacy remodel • Repayment: Monthly payments of $3,734 over three years • Collateral: Personal property Description of Business Management Structure • Dana Ling { Pharmacy manager and compounding pharmacist • Store Manager • Advisory board: oDana Ling oTribal Physician oRachel Merrill oNursing Home Representative oJoe Cammack oCustomer Description of Business Insurance • Fire, earthquake, and theft • Professional liability • Key person insurance for Dana Security • Burglary alarm • Sprinkler system • Police department located in same shopping center Description of Business Service Mix Description of Business Compounding • Joint venture with Jim’s Pharmacy • Increase patient population and gain significant margins • Veterinarians, Olympic Game Farm, rural farmers Description of Business Immunizations • Collaborative agreement protocol • Travel clinic • Marketing to doctors, assisted living homes, and general public Description of Business 340 B Contracting • • • • S’Klallam Tribe’s Jamestown Family Health Clinic Medication costs less than 50% AWP Educating clinic prescribers Beneficial to clinic and offers additional pharmacy clientele Description of Business Product Mix Description of Business Alternative medicine • • • • Evidence based medicine Patient education workshops Herbal of the month promotions Network with local practitioners Foot care products • Close relationship with local podiatrists • Treatments for most common geriatric foot ailments Description of Business Travel Products • Optimize comfort, convenience, and aesthetics Local Lavender Products • Ideal souvenirs • Shipping and delivery services offered • Bath and shower items, comfort items, and essential oils for aromatherapy Marketing Plan Competition Insert map here… Marketing Plan General Promotion • • • • Digital marquee Tribal connections Sequim Gazette Sponsor local events and promote MTM Marketing Plan Target Market • • • • Patients seeking individualized care Customers needing compounding services Assisted living homes Jamestown S’Klallam tribe members Potential Market • Incoming new residents • DME services • Current residents going to other pharmacies Physical Description Financial Information Financial Information Financial Information Financial Information Financial Information Financial Information Cash Flow Projection Cash From Operating Activities Net Operating Profit Increase In Accounts Payable (+) Increase In Accounts Receivable (‐) Net Cash Flow From Operating Activities Cash From Financing Activities Net Cash From Financing Activities Net Change In Cash Cash Balance End of Year 2009 2010 2011 11,784 8,215 7,277 12,722 ‐98,004 8,709 7,714 ‐97,009 15,426 9,231 8,176 16,481 0 0 938 12,722 120,000 120,000 995 22,991 0 0 1,055 16,481 Summary of Loan Request • Total Assets: $60,000* • Debt to Equity Ratio: 0.5 • Collateral: Personal Property* • Personal Guarantees: Dana & Rachel liable for all loan terms • Special Conditions: Joint venture with Jim’s Pharmacy * See Addendum to Loan Request in Handout Closing Statement Acknowledgements and Questions • • • • • • • • • • • • Don Downing Jackie Gardner Cy Frick Joe Cammack Jim Cammack Mary Ann Odegaard Beverly Schaefer Gina Carpinito Ryan Oftebro Steve LaFever Linda Herzog, Sequim City Manager Laura Dubois, Sequim Mayor